May 9, 2003

Groups of tourists from Europe have been seized in Algerian desert region of Illizi in last few months; their fate, and who took them, are unknown; region is known for drug and gun-smuggling, but it might also provide hideaways for Islamic militant group which has long waged war against Algeria's secular government; in all, 31 tourists are missing: 15 Germans, 10 Austrians, 4 Swiss, a Swede and a Dutchman; no ransom demands have been reported; most of missing people are said to be experienced adventure travelers, equipped with global positioning satellite navigation equipment and satellite telephones; governments involved refuse almost all but most cursory comment; Algeria has reportedly sent 5,000 troops, aided by 300 local guides, to desert to look for missing tourists; Algerian tourism official has been quoted as saying they are alive and that negotiations are taking place to win their release; photo; map (L)

JUST two weeks to go, and panic levels are rising as homeowners contemplate the essential question of the summer season: ''Will I get my deck/pool/kitchen finished before Memorial Day weekend?'' Construction deadlines set months ago suddenly seem laughably optimistic -- although no one is laughing -- and homeowners in resort towns are trying everything from tears to bribes to get their projects done in time. Page 6.

Alessandra Stanley reviews British television adaptation of Zadie Smith's novel White Teeth, shown on Masterpiece Theater; photos (M)

Sega abandons plans to merge with Sammy Corp after sides fail to agree on management control; potential suitor Namco Ltd withdraws its offer because Sega declines to discuss merger (S)

Analysis of Federal Reserve's concerns about deflation; says many economists believe that prices could begin to fall in widespread fashion with weak demand; holds Federal Reserve is running out of leverage against deflation; says several Wall Street banks expect Federal Reserve to cut short-term interest rates to 0.75 percent before July; holds as short-term rates edge closer to zero, expanding money supply might have little effect on ease of obtaining credit; says Federal Reserve is worried that deflation is symptom of economy's frailty, and falling prices could cause real problems by themselves; graph; photo (M)